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January 31, 2019

Report: Maine heating fuel industry contributes $440 million in earnings

Photo / Maureen Milliken
Photo / Maureen Milliken
The Maine Energy Marketers Association has released a report detailing the economic impact to the state of fuel oil, market trends and workforce development. The association runs the MEMA Technical Education Center in Brunswick, shown above.

About Maine Energy Marketers Association

MEMA has more than 300 members, including 125 heating oil, propane, biofuels, pellet, electricity, motor fuels providers as well as convenience store owners who serve more than 415,000 Maine households. MEMA also has more than 175 associate members who provide goods and services to Maine's petroleum dealers and their customers. The organization's members own and operate 70% of Maine's 1,300 convenience stores, through which we sell more than 1 billion gallons of gasoline and diesel fuel. Members also sell more than 90% of all the propane sold in our state each year.

About MEMA Technical Education Center

MEMA members own and operate the state's leading non-profit 501c(3) HVAC-R training facility, MEMA Technical Education Center. Overseen by an all-volunteer Education Committee comprised of business owners and associates currently working in the industry, MTEC's curriculum continually evolves to reflect relevant trends, advancements and industry best practices.

A report on the economic contribution of the state's heating oil and propane industry released this week says that it accounts for 9,500 jobs, both directly and indirectly, and $440 million in earnings in Maine.

The income translates to an estimated $25 million in state government revenue and $11 million in local property tax revenue, according to the report, "Economic Contribution of Maine's Heating Fuel Industry 2018."

The report also found that households are using less than half the fuel oil to heat their homes that the were in 2000 and, like many Maine industries, recruiting and training a workforce is essential as experience workers age out.

The report was funded by the Maine Energy Marketers Association "to give legislators third-party data to help them fully understand the economic impacts of their energy policy decisions," according to a news release from the association. It was produced by Stepwise Data Research, a Maine-based data analysis and research firm.

The report looked at the home heating fuel industry's contributions to employment, wages, secondary jobs, tax revenue and communities in Maine, as well as market trends and workforce development.

To complete the report, Stepwise used a range of specialized public and proprietary secondary data sources, a survey and interviews with MEMA members, and customized economic models from the University of Southern Maine's Center for Business and Economic Research.

Economic impact

The industry's direct economic impact includes transactions like fuel delivery and heating equipment maintenance, which support 5,000 jobs (most provided by fuel dealers and heating contracting companies) and $255 million in annual payroll, with yearly employee wages averaging $44,300 — slightly higher than the state median of $43,900.

Indirect economic impact — including supply and equipment from local vendors, as well as employees' local spending, which supports local businesses and jobs in health care, hospitality, and retail — supports 4,500 jobs and $215 million in payroll.

Market trends

A decline in home heating oil use and consumption since 2000 in which the share of homes using fuel oil or propane as the primary source of heat decreased from 85% to 73%, bringing the current total to 400,000 Maine homes.

Mainers' average annual fuel consumption has fallen from 1,500 gallons in the 1980s to less than 700 gallons. The decrease is partly because of industry innovations like modern boilers, weatherization and more efficient, cleaner-burning fuel.

The trend is likely to continue on its own, without any government-mandated programs, given the continued pace of innovation and the many home heating options consumers have today, the study found.

The report notes one factor that may slow the decline in households switching to other energy sources is that a new, cleaner-burning oil with emissions equivalent to natural gas has been developed.

Ultra-low sulfur heating oil, introduced in July, has virtually no sulfur, can be used in existing oil heating systems and lowers heating bills by burning more efficiently. The oil, commonly known as ULSHO, emits almost zero particulates, and cuts sulfur dioxide emissions by 99 percent and nitrous oxide emissions by 10 percent compared with traditional heating oil, according to the report.

Emissions from the cleaner heating oil are equivalent to natural gas, according to research conducted at Brookhaven National Laboratory, a multipurpose research institution in New York funded primarily by the U.S. Department of Energy's Office of Science.

Workforce development

More than half of workers employed by the heating fuel industry are over 45, so recruiting the next generation of HVAC-R technicians now is crucial, the study found.

The report shows that experienced technicians can earn $22,000 more than entry-level technicians, and experienced heavy-duty truck drivers can earn $18,000 more than entry-level drivers.

To help train technicians for a career in the trade, Maine Energy Marketers Association recently invested more than $500,000 in its state-of-the-art HVAC-R technical school, MEMA Technical Education Center. The school has a 95 percent job placement rate, with many students finding employment before graduation.

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